Encuesta

Prepararse para lo Inesperado

Preparing for the Unexpected

by Anna Haug

Month in and month out, we face one financial challenge after another. Usually they're not too extreme but they can take a toll, especially when they come in series as so often seems to happen. It is important to look at some serious "what if" financial scenarios in our personal lives to be prepared.

Gas costs $5 a gallon

How many miles do you typically drive each year? How many cars are in your family? How can you modify your driving to reduce miles traveled? What's your fuel efficiency like, and can you improve that without running costs even higher, say, by buying a new car? Do you have access to public transportation as an alternative; how much will that cost?

Let's look at the cost for one car. For $5 a gallon gas: Say you usually drive 13,500 miles a year, get about 20 miles to the gallon, and have been paying $3.50 a gallon for gas. Your costs will go from $2,363 a year to $3,375-a little more than $1,000 a year or $85 a month. Not pleasant, but likely manageable. Now multiple that by the number of cars in your household.

Your employer stops contributing to your 401(k)

Is this a temporary change or does it look like it will be permanent? What if it is permanent? Can you increase your own contribution to pick up the slack? What budget adjustments will you make to allow you to do that? Are other obligations-your child's college fund, for example-in good shape?

You lose overtime pay you've been relying on for years

Has the OT been paying for extras, or does it cover basic living expenses? What's your debt level; can you manage without the OT because you're debt-free except for your mortgage? Can you refinance a loan-your first mortgage and a car loan could be prime opportunities-at the credit union to help make up for lost income? What are your chances of getting a second job part time?

Now, think about this. What would you do if the motor burns out on the washer. Oh, and of course this happens two months after it goes out of warranty.

That's life

Now let's say more than one of these challenges crops up at the same time. That's life.The people at your credit union can help you budget and plan so that you can survive these unexpected events.